What next for local authorities: challenge of the new freedoms

Susan and ChrisThe localisation of business rates in London in 2019 provides the opportunity for local authorities to think differently about how they work together and how and with whom they deliver the homes that are needed in the Capital.

That was the conclusion of a Chatham House roundtable with a group of London housing Chiefs hosted by Altair last month.

The challenge for local authorities not just in London, but up and down the country will be how will that new found freedom be used. And how do you prepare for it to ensure housing gets its fair share of resources.

With all the changes to housing policy and challenges around welfare reform, right to buy, pay to stay and the sale of high value council assets, the importance of good business planning was recognised by all the participants. Altair has recently worked with Enfield to implement a BRIXX Business plan (BRIXX being the bespoke Business Planning tool now used by most housing associations). And Enfield spoke of seeing the benefit in their approach to analysing the financial implications of housing proposals and their impact upon the Housing Revenue account.

As part of this Business Planning, many local authorities were looking at their own right to buy receipts and how to ensure that they are spent, before they need to be handed over to government. Some had offered the receipts to housing associations to deliver social housing, but the take up was low. This is a pity, since it presents both an opportunity to bring additional funding to projects and has the potential to ensure genuinely mixed tenure schemes.
There are hurdles to overcome at both a regional and national level, but there was a desire to make things work, matching local authority and regional funding and the Housing Associations or developers’ own resources.

Despite the anger at the ‘forced’ assets sale and the deal that had been done between housing associations and the government without consulting local authorities, those at the roundtable were keen to ensure that receipts generated in London stayed in London.

Some were looking at using local authority RTB receipts for buy back and also at using the General Fund alongside to build outside the housing revenue account. Others were setting up their own RP or local housing company, even though the advice pre- election suggested that these would be subject to the same rules on right to buy as existing Council homes.

There was an appetite for new thinking, for new partnerships and for new deals to be done. Some local authorities will want to go it alone and will need to build their housing financial modelling and development delivery capacity. Some, such as Hackney, Islington, Newham and Ealing are already doing it. Others will want to work with partners who can bring ideas and solutions, pooling resources and expertise.

Start with a good business planning model is our advice and a strong approach to risk management. 2019 is only 4 years away. So the clock is ticking to make sure the opportunities and the risks presented by the next phase of devolution are not missed.

The event was hosted by Altair partners Susan Kane and Chris Wood.  For more information, please contact Susan on 07870 685 891 | susan.kane@altairltd.co.uk and Chris on 07932 693 292 | chris.wood@altairltd.co.uk